A project management office (PMO) is a group or department within a business, agency or enterprise that defines and maintains standards for project management within the organization.
The primary goal of a PMO is to achieve benefits from standardizing and following project management processes, policies and methods. For the office to be most effective, it should embody the organization's culture and strategy. The popularity of the office has increased, as more companies with PMOs have received returns on investment.
Nearly seven in 10 organizations globally have a PMO, a figure that has remained constant for five consecutive years, according to the 2016 Pulse of the Profession report by the Project Management Institute (PMI).
PMO roles and responsibilities
A PMO is generally responsible for guidance, documentation and metrics related to the practices surrounding the management and implementation of projects within the organization. A PMO may also get involved in project-related tasks and follow up on project activities through completion. The office may report on project activities, problems and requirements to executive management as a strategic tool in keeping implementers and decision-makers moving toward consistent, business- or mission-focused goals and objectives.
A PMO generally bases its project management principles, practices and processes on an industry-standard methodology. Here are a few commonly used project management methodologies:
- Agile. The Agile method applies to projects that require speed, flexibility and continuous delivery of product to the customer in short delivery cycles.
- Waterfall. The waterfall methodology allows for increased control during each phase of a project, but can be very inflexible if project scope changes occur.
- Scrum. This term is based on the formation of players in the game of rugby and is a part of the Agile framework. Its deliverables are due every 30 days. Workgroups that have had difficulty in prioritizing work can improve productivity when they switch to Scrum.
- Six Sigma. Six Sigma is a methodology used to improve processes by getting rid of what are considered defects -- or a product or service that does not conform to its specifications.
Types of PMOs
There is no standard approach to PMO development; however, an effective PMO has a strong foundation aligned with the organizational strategy of the company.
How a PMO is designed and staffed for maximum effectiveness depends on a variety of organizational factors, including targeted goals, traditional strengths and cultural imperatives. The types of PMOs in organizations have remained unchanged since 2010; two-thirds of organizations have a department-specific, regional or divisional PMO or PMOs.
There are three basic organizational structures for a project management office.
- The project repository: This model occurs most often in organizations that empower distributed, business-centric project ownership or enterprises with weak central governance. The project office simply serves as a source of information on project methodology and standards. Project managers continue to report to, and are funded by, their respective business units.
- The project coach model: This model assumes a willingness to share some project management practices across business functions and uses the project office to coordinate the communication. Best practices are documented and shared, and project performance is monitored actively. The PMO in this model is a permanent structure with staff and has some supervisory responsibility for all projects.
- The enterprise project management office (EPMO): This model also assumes a governance process that involves the PMO in all projects, regardless of size, allowing it to assess scope; allocate resources; and verify time, budget, risk and impact assumptions before the project is undertaken. Funding is generally a combination of direct, budgeted allocation for baseline services and a fee-for-service charge for others.
How EPMOs can be effective
EPMOs exist in about half of organizations, according to the PMI report. While they play a critical role in delivering organizational value, many organizations still struggle with how to define the EPMO role, to position it for long-term success and utilize the office to help achieve strategic objectives. Effective EPMOs have broad enterprise-wide responsibility and help direct strategy and focus on value delivery. Approximately 27% more projects are completed successfully, and there are 42% fewer projects with scope creep when organizations align their EPMO to strategy, according to the PMI report.